Labour 'to U-turn' on pensions

Downing Street plans a Uturn on its popular pledge to protect pensions of the thousands of employees whose companies are taken over every year, it emerged today.

Details of the decision emerged in a leaked memo and came as yet another blow to private pensions, which are already being hit by a flood of companies switching from generous final salary schemes to cheaper versions. It will also affect staff whose departments' activities are contracted out to other suppliers.

The memo was part of a review into so-called TUPE regulations, aiming to protect the pay and conditions of employees in their transfer deals from one employer to another. About 14,000 workers are affected by such moves each year.

Point one of the recommendations list leaked to the Daily Telegraph reads: "The outcome of the TUPE review should be that the scope of TUPE regulations should not be extended to cover pensions and service contracts."

Only three years ago, Ian McCartney, then a trade minister and now Minister for Pensions, pledged to revise TUPE rules "to provide for a transferee employer to be required to provide a broadly comparable pension on future service".